Gold prices are steady and waiting for new developments that could trigger movement. Interest rates remain uncertain, with the September Non-Farm Payrolls (NFP) possibly changing expectations. The US Consumer Price Index (CPI) matched predictions, leaving markets unaffected. There is a strong expectation for a rate cut in September, with some considering a 50 basis point move. However, this could be too aggressive if strong economic data appears before the Federal Open Market Committee (FOMC) meets.

Gold Price Forecast

In the long run, gold is expected to rise due to expected easing from the Fed and lower real yields. In the short term, changes to interest rate expectations could cause brief declines. On the daily chart, gold is trading between the 3,438 resistance level and the 3,245 support level. A breakout in either direction is still pending further clues. The four-hour chart shows some minor support around 3,330, where buyers are poised for potential rallies. The hourly chart reveals a slight upward trend, indicating bullish momentum. Buyers will depend on this trend to boost prices, whereas sellers are looking to break down toward lower supports. Key upcoming economic reports include the US Producer Price Index and Jobless Claims, followed by US Retail Sales and the University of Michigan Consumer Sentiment report. Gold continues to trade sideways as we await a clear signal for a breakout. The July CPI report, which showed a slight cooling in inflation to 2.8%, didn’t significantly impact the market. The September meeting of the Federal Reserve is now in focus for guidance.

Traders’ Expectations

There remains a strong expectation for a rate cut next month, with fed funds futures indicating over an 80% chance of a 25 basis point reduction. Some are even speculating about a 50 basis point move, which seems too optimistic. A robust jobs report for August could easily challenge this view and cause a sharp shift in pricing. Overall, the long-term outlook for gold should be positive as long as real yields drop and the Fed continues to ease. High yields in 2023 had previously capped gold prices. Any unexpectedly strong economic data in the next few weeks could trigger similar short-term corrections. On the daily chart, we find ourselves in the middle of a range defined by the significant $3,438 resistance and the $3,245 support. Until we see a clear break, traders are likely to buy near the lower end and sell close to the upper end of this range. Looking at the 4-hour chart, there is minor support around $3,330, where buyers have recently entered the market. Those considering a long position might view a pullback to this level as an opportunity, with a clear risk level below it. On the other hand, sellers will watch for a strong break of this support to push prices down toward the main $3,245 level. On the 1-hour chart, a slight upward trendline indicates immediate bullish momentum. Buyers will likely depend on this trendline to help push prices higher within the range. If this line breaks, it could signal sellers that momentum is shifting, potentially testing the $3,330 support area. Today’s Producer Price Index (PPI) and the latest Jobless Claims data will provide additional insight into inflation and the labor market. Initial claims were reported at 225,000, indicating ongoing resilience in the labor market. Tomorrow, we will conclude the week with the July Retail Sales figures and the preliminary University of Michigan Consumer Sentiment report. Create your live VT Markets account and start trading now.

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